Legally blind

TWO years ago, just before Christmas, we took a look at how local lawyers would be stripped of their easy, charge-by-the-minute money.

Artificial intelligence, we said, would come and eat their lunch.

All those standard contracts and business transactions that need a trained legal eye would soon be disrupted by machines that could perform thousands of these operations within seconds.

“Everything you do takes too long,” we said.

And then you have the audacity to charge by the minute and deliver bill shock like a defibrillator.

It has been two short years and we still have lawyers charging by the minute.

You could be forgiven for thinking that not much has happened. You would be wrong. The world’s Big Four legal firms — Deloitte, EY (Ernst & Young), KPMG, and PwC (Price, Waterhouse, Coopers) — have been busy building out their tech strategies to dominate legal services at scale, following the disruptive breadcrumbs left by “alternative legal service providers” or ALSPs.

These alternative providers make light work of legal document research, investigations and data searches and increasingly cut costs from compliance services and risk assessment.

What’s at stake is the end of real choice and troubling lack of transparency about how legal decisions are made.

The bigger companies are sitting at a poker table just like the raiders of music and movies and advertising.

It’s winner takes all — as it was with Google, Apple, Facebook, Amazon, Microsoft, Netflix — all of them carving their territory and building monolithic, global platforms or capabilities designed to rule them all. Here’s how it works. Just like your favourite TV lawyers, legal firms tender for big, juicy contracts with government and big business.

The big firms get paid a lot because they have batteries of lawyers who are experts in diverse, but tightly defined fields.

You get what you pay for.

The more experts you have in your firm, the more expensive your services.

Think about all those minutes of specialised billing.

Inevitably, many smaller businesses cannot afford that legal expense and settle for less and only bring in the biggest guns when needed.

Or they cut costs by dipping their toes into the automated services provided by the “alternative” providers and their algorithmic efficiency.

The Big Four have built their global fortunes on the big end of town. Not any more. All of them are now investing heavily in these ALSPs, in artificial intelligence, aiming directly at the process work that so many smaller firms rely upon.

A recent report from Thomson Reuters says the alternative legal services sector has grown $2 billion in just two years.

“Among the largest and fastest growing ALSPs are the Big Four accounting firms – Deloitte, EY, KPMG, and PwC,” the report said.

“The Big Four’s legal service offerings compete more directly with law firms than those of other ALSPs: about 23 per cent of large law firms say that they competed for and lost business to the Big Four within the past year.

“Interviews with decision-makers at the Big Four showed them to be optimistic about their ability to capture market share and confident in the strength of their unique selling proposition.” There will be a shake-out. It will take years, just like it did with music and movies and news and information. There will be fewer players. They will provide amazing services, integrated into our legal lives.

It will be seamless and disarmingly helpful.

I can’t imagine what it will be like.

I couldn’t imagine what Facebook would be like in 1980 either.

But it bothers me that these changes are happening without sufficient oversight and with the assumption that such change must be good and in our best interests.

Once again, the secretive way artificial intelligence works is underpinning new business models that no one really understands.

The last place we want such lack of transparency — how a machine makes its decisions — is in legal processes that affect people.